Mumbai: Notching gains for the fourth day in a row, India's benchmark equity indices on Tuesday closed at record highs as risk sentiment improved on optimism over the signing of a phase-one trade deal between the US and China on Wednesday.

The BSE Sensex advanced 92.94 points to end at a new record high of 41,952.63, while the Nifty rose 32.75 points to hit a record of 12,362.30.

Asian markets closed mixed. Japan's Nikkei225 gained 0.7%, while Hong Kong's Hang Seng lost 0.2%. China Shanghai Composite lost 0.3%.

Back home, the market breadth favored the buyers. On the BSE, 1468 shares rose and 1035 shares fell. A total of 156 shares were unchanged. On the Nifty, 37 stocks advanced while 12 stocks declined and 1 remain unchanged.

Among sectoral indices, BSE FMCG index gained the most, up 1.5%, followed by BSE Metal which rose 0.9%. The BSE Auto index advanced 0.7%.

Investors are, however, likely to exercise caution going ahead as data released showed that India’s wholesale price-based inflation surged to a seven-month high of 2.59% in December, a day after country’s retail inflation galloped to a five-and-a-half year high, signalling increasing pricing pressures in the economy. In November, WPI-based inflation was at 0.58%.

Retail inflation rose to 7.35% in December from 5.35% a month ago, according to data released by the statistics ministry on Monday.

Data released by the statistics department on Monday showed food inflation accelerated 14.12% in December from 10.01% a month ago as vegetable prices surged by 60.5%. Core inflation eased to 3.4% year on year in December.

Meanwhile, Yes Bank fell 8.4% as it has been banned from trading in NSE's F&O segment after the security crossed 95% of market wide position limit.

Deepak Fertilisers & Petrochemicals soared 5.02% after the firm divested part of its industrial land in Dahej, Gujarat, for 99.20 crore as part of its strategy to divest non-core assets.

Delta Corp fell 3.5%. The company reported muted net sales of Rs205.13 crore while consolidated net profit rose 9% to 55.07 crore in the December quarter.